The market’s appetite for wool is high, despite rising prices.
Australian Wool Innovation (AWI), not-for-profit company that invests in R&D and marketing to increase the long-term profitability of Australian woolgrowers, reported Tuesday that wool supply has increased 3 percent to 5 percent compared to last year.
The Australian Wool Exchange export results indicate that 5.3%, or 10.1 million kilograms, of greasy wool has been sold this season compared to last.
The robust supply should have kept wool prices at levels similar to last year, but AWI said prices have continued to climb.
“Although recent weeks have seen a less consistent and slightly more volatile market relative to recent months, there are some strong indications that the current price levels can be sustained and give a continued positive outlook for the industry,” AWI wrote in the report.
China continues to be the biggest buyer of Australian wool. China increased its intake 6.1% this season, accounting for 74 percent of Australia’s national clip, the report said. Czech Republic’s consumption increased 26.9%, while Italy increased its intake 6.5%.
India and Korea have pulled back, but remain in the top five export destinations.
Wool prices in March 2018 were steady. The Eastern Market Indicator (EMI) monthly average finished at $13.70 per kilogram clean, a decline of 15 cents per kilogram clean since February.
AWI remains optimistic about rest of the selling season. “With recent export data and supply levels pointing in a positive direction for the woolgrower, the remaining three months will hopefully bring good results,” AWI wrote.